How to make Facebook work for you – an Interview with Dennis Yu and Logan Young

Anyone who follows you knows about the dollar a day strategy and how to get famous on Facebook, but they may not know exactly where to start. Can you explain your plumbing metaphor?

When we talk about plumbing, people think about constructing houses and the pipes that relay water – I think the same thing is true back in the days of the Internet, ten or fifteen years ago where we all had straw huts. There wasn’t a need for the kind of plumbing that you have when you have commercial buildings and skyscrapers.

Instead of just having websites where it’s relatively easy to install a shopping cart, you’ve got lots of different places that people can be – and the millennials know that. You guys in the crowd, a lot of you know that people are on Facebook, Snapchat and YouTube. They’re checking in on different apps. And wherever people are that’s where you can sell.

So, the question is how do you tie all those traffic sources – communities, people and lists together? Some of them are email addresses or app installs. Sometimes it’s a pixel, Facebook log in, or a username/account password kind of thing.

Can you explain a little more how pixels and tracking work?

A pixel is a one-by-one JavaScript. It’s actually an image tag that’s used for tracking users. So, if you go to a website, you may see notifications where it says, “Hey, this site uses cookies that may be monitoring you. You may see notifications in our privacy policy below.”

But basically, if you’re on the Internet, you’re being pixeled. If you are on Facebook, CNN or you’re reading Sports Illustrated – then there is a pixel that’s tracking the fact that you were clicking on different things. And pixels allow for analytics and remarketing.

If you’re looking at something like a hotel or you’re shopping for something on Amazon, and that product follows you onto Facebook or you see it again inside your Gmail or some other website, that thing that you were just looking at – that is driven by a pixel. A pixel is one form of remarketing, called web remarketing because it’s based on websites.

But you can follow people around based on anything. If you have their email address, their phone number, you know if they’ve checked in at the store. You know that they’ve done something. Those are all different ways of tracking people. I might have your phone number. I might have your Skype ID. Maybe you went to my site and you put some information in.

The idea of tracking people is the heart of plumbing. And plumbing is: how do we bring this all together? If somebody just interacted on Twitter with me, don’t I want to be able to run an ad to them so they can come back to my site or buy something directly within Twitter?

Whatever the next stage is in the relationship, all of these social networks out there – because they are free to the users, they’re paid by the advertisers – that means that we as advertisers, get that data. For example, Twitter just released remarketing audiences, which means that people who engage with your Tweets frequently get put into a bucket that advertises who to market to.

The goal of e-commerce is to drive sales. You want to make money, and it’s one thing to have fans and people tweeting, YouTube views, people signing up for your email list and listening to your podcasts. But businesses have to make money, otherwise they’re called “charities”. And even still, they have to generate revenue.

And so we talk about these six phases. Plumbing is the first phase because without this kind of tracking, without knowing where your users are and tying together Google Analytics, which you guys have probably heard about – this wouldn’t be possible.

So why is tracking or “plumbing” so important?

You want to drive revenue and sell stuff. Plumbing is that first step to bring everything together. If you’re just starting up your own business, I know a lot of kids that want to sell things and they want to be entrepreneurs – now is a great time for entrepreneurship. They go straight into trying to sell, and they find that it’s not working because they haven’t developed the relationship. They haven’t developed their goals, content, and targeting.

We talk about there being six phases that have to happen for the selling of anything. And in the case of e-commerce, plumbing is even more important because you want people to buy stuff over and over again – like Amazon. You don’t want people to buy just one time. You want to have a broad product range. If someone’s bought A, maybe they’d like B.

We think of Apple and the App Store, or Spotify and the different songs that you listen to as e-commerce products because if you like the Goo Goo Dolls, then maybe you like whoever the related bands are for that.

What comes after plumbing?

The next three phases – Phases II, III, and IV are goals, content, and targeting. These really tie in together. We call them our business strategy. So the goals: you have to have goals for your company that are measurable and also have a reason behind them, a “why” behind them.

Based off your goals, you’ll create content. And depending on where you’re advertising, you want to create different types of content. Content could be anything from a video, to a still image, to a podcast or an article, a blog post. All these different things are content. The key is just to get you going.

People kind of want to jump to the selling point in advertising. But they’re not ready to push their content. No matter what you have – even with an iPhone, you can create video. Video performs really well on Facebook right now. Use your iPhone. Create some video. Create some content.

Next is targeting. Your content also ties in with the targeting. Depending on who your target is will depend on what kind of content you make. Then Facebook has really powerful tools to help you microtarget. We can then retarget and do these different things because our plumbing is in place.

You need to focus on your goals, content, and targeting as one – as your overall strategy. Then once you have those things all tied down, you’re able to move onto amplification, which is based on what we call advertising. Advertising and amplification are the same thing. You can do it ondifferent channels.

Your goals, content, targeting, and strategy doesn’t have to be confined to one channel, right? It’s for everything. It’s just your overall business strategy. And then you can amplify it through Twitter, through LinkedIn, through Facebook, through direct mail, however you’d like to.

And then, lastly, the sixth phase is optimization. So, as you’re amplifying and advertising, you’re going to want to check back to see how your ads are performing. Again, we really enjoy Facebook, and we do a lot of work on there. Facebook really helps you out here and doing a lot of the work for you. They give you a relevancy score of how your ads are performing from one to ten.

Based off what the goal of the ad is, you can see if an ad is performing well. Maybe I should put more of the budget into it. If it’s not performing, I should tweak it or cut it. If you have an ad and you’re amplifying it for one week, we suggest checking in on it at least every other day. Then halfway through the week, make a decision to continue to amplify, edit, or cut it if it’s not performing at all. And those are the six phases.

So what does all of this look like in practice?

Remember Logan talked about you’ve got to be able to tell your story. One of our friends, Travis Lutter, he won UFC number two and he was a world champion. He owns a couple of gyms now because he’s past the age of competing and he’s growing his list.

He’s selling merchandise online. He’s selling DVDs on how you train for MMA and Brazilian Jiu Jitsu. I like to MAA (metrics, analytics, and action) – which is how we do analysis; but MMA, the mixed martial arts – he’s got training videos, classes, equipment, and a clothing line.

To do that, he’s got to be able to tell his story and to demonstrate that he is credible at kicking people’s butts, versus some other random dude who’s watched some videos. He has videos of him competing. Video, video, videos really keep the content, by the way. You guys know that. Not just text, not just pictures of your products.

Imagine if he were just to sell a bunch of DVDs and different colored belts. He would be just like all the other people on the Internet trying to sell that stuff. But because it’s Travis Lutter, then people understand who he is. They’ve seen his fights. He’s famous. That’s just one example of all different pieces of content that lives in something called the CMS, which is the content management system.

There’s many CMS’s. A lot of people are going to use the default, which is WordPress. But there’s so many other ways that you could house your content. Even Hootsuite could be considered a CMS.

Facebook’s own native tools that allow you to manage and schedule, those could be considered content management systems. And then when you tie in with advertising systems, because any native system: Facebook, YouTube, Instagram, Twitter, has their analytics, their content management, and their ad system all built together.

They’ve got their goals, content, and target all built together because they want you to publish amazing content that is going to result in a sale. And that’s good for the community because if it’s interesting content, then the advertiser is not seen as interrupting that user that’s going through their feed and seeing what their friends are doing over the weekend, this kind of thing.

Mark Zuckerberg and I have some history where he and I have argued about this several times over the last eight, nine years. And he told me back in 2009,

“Dennis, I believe that advertising when systems are able to provide filters and automatically determine if it’s interesting or not will not be intrusive to the user, that when done properly and when advertisers are educated, there will be no difference between content that you see natively and content that happens to be paid for, which we call advertising.”

I told Mark, I’m with him on that. I just don’t think it’s going to be there for another 15 to 20 years. I believe technology gets there a lot faster than the ways ad agencies create ads, the way you buy TV, the way people advertise in the newspapers and yellow pages.

Do you see that being engaging? Do you see them telling their story, or do you see them saying “Better call Saul,” and “We can come fix your broken toilet faster than these other people, AAA Plumbing.” Do you see advertisers and marketers that are truly educating and being funny? You don’t have to be a Dollar Shave Club.

Where do most companies fail you think?

People will spend millions of dollars buying a Marketo, which is the best in marketing automation. And they have no content. And we say, “Wait, wait, wait, wait. You need to get some content in place before you start investing in all this technology”. If we come in as a technology company, and the client wants us to implement all these crazy things because they heard someone else was using this software too because Nike or the Golden State Warriors or whatever – they need to have content.

Now from a young person’s point of view, what’s the best way to start?

We are in the business of teaching, and we want to create jobs for young adults and anyone that’s willing to learn and willing to work hard. We believe that training and education and jobs are all one and the same – because that’s the best way you’re going to learn. And we lose money so that we can produce content like this with good people like Harry that actually believe in education.

If you want to go through these phases that we talked about, do it for your family. Maybe you’ve got a brother that’s got a business. Run him through these phases, and he will love you. He will think that you are some kind of magician.

Everybody in small business is struggling. Give them the help they need, and then you can become a pro. You can become a contractor, freelancer, agency owner that does this and teaches other people how to do it.

It’s more about process than it is about software. But you’ve got to be trained up, or you could go get your dream job. Your options are limitless, if you understand how to use the dollar a day technique.